Intraday Trading
Stock value in the Stock market is constantly fluctuating, giving multiple trading possibilities during the day. These price changes reflect fluctuating investor opinions regarding the company’s shares. During the day, stocks rates vary caused by changes in demand and supply characteristics.
Simply said, when demand surpasses supply volume, the scrip’s price rises, and a larger demand-supply disparity translates in a higher price. Which takes us to the concerning question of what is intraday trading in share market? And simply put, intraday trading aims at making the most of this this fluctuation of price of stock during a day.
Though the answer was precise it still needs to answer a broader question of what is intraday in share market or what is day trading in stock market? To answer all of this we must dig in deep and explain precisely what is intraday in stock market.
What is Intraday Trading in Stock Market?
Intraday trading entails trading equities on the same trading day. Equities are bought here not to invest in for a longer period, but to benefit from the fluctuation of index options. As a result, variations in stock values are tracked in order to turn an earnings from buying stocks which are priced lower and booking profit at a higher rate.
Here, it is also critical to understand what is delivery and intraday. To answer what is intraday and delivery may be easier because trading in stocks makes it so for the investors to understand the difference between both. While delivery is a stock that an investor buys for an indefinite period of time, intraday stocks are investment which needs to settle on the same day itself.
So the next question arises, what happens if we don’t sell intraday shares? Well in most cases the stocks are squared off at the end of the trading hours, which means the investors may have to bear a loss or in some cases the trading platforms just converts the stocks to delivery, but here too the investor may have to pay a brokerage to the platform.
How to Buy & Sell Intraday Trade
Before an individual gets into the details of what is intraday in stock market, and how to buy and sell intraday, they must open a Demat account with a stockbroker to hold securities on their behalf. After a Demat account is opened the related trading account needs to be linked with the investors’ bank account to ensure fund flow.
When it comes to booking profit in intraday one must invest in much research and must invest in understanding indicators such as Moving Averages, Bollinger’s Bands, Momentum Oscillators and Relative Strength Index.
After the requisites the investor is ready to trade Intraday. Buying intraday stocks first requires you to add fund to your trading account. The investor may first track the sentiment of Sensex & Nifty on the particular day, and also keep a watch on the interested stock.
At the researched or determined price of the stock the order may be booked. If the investor had done a thorough research they may be able to identify an expected high of the stock, hitting the high is your que to book profit and exit the trade. You may continue to do this more than one time a day.
Intraday requires, much time investment, in-depth research, awareness of the market hours, the investor may set limit for their loss and also an exit price when order is booked.
These are few of the basic of intraday trading and how to do it, whilst it is known to give small and consistent returns, this trading option is quite riskier than trading in delivery.